AP News

Quicksilver Resources gives back some gains


NEW YORK (AP) — Natural gas producer Quicksilver Resources gave back some gains on Tuesday, a day after getting a bounce from its decision to sell a 25 percent stake in its Barnett Shale oil and gas assets to a subsidiary of Tokyo Gas Co. for $485 million.

THE BACKGROUND: On Friday, Quicksilver Resources Inc. announced that it was selling the stake and said that it would still operate the assets located in Texas. The Fort Worth, Texas, company said it expected to use proceeds from the sale to reduce debt. The deal is expected to close on April 30.

Shares of Quicksilver Resources climbed on Monday, as the market was closed Friday in observance of Good Friday.

THE ANALYSIS: Michael Scialla of Stifel Nicolaus said in a client note that the stake sale gets rid of some concern surrounding the company's ability to fund a $435 million debt maturity in 2015, but that its balance sheet is still challenged.

The analyst reiterated a "Hold" rating.

Raymond James' John Freeman said Quicksilver Resources received a solid price for the Barnett Shale stake, with rebounding natural gas prices likely working in the company's favor.

"The Tokyo Gas deal is certainly a step in the right direction, but we'd rather wait for more progress on the recapitalization front before getting excited about the name," he wrote.

Freeman maintained an "Underperform" rating.

Quicksilver Resources said that it does not generally comment on analyst reports.

SHARE ACTION: Quicksilver Resources' shares fell 21 cents, or 8.3 percent, to $2.39 in afternoon trading. Over the past year, the stock has traded in a range of $1.62 to $5.90. Shares are down 9.1 percent for the year-to-date.


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus